articles by Susan

Unfazed by Finra Charges, Seniors Still Swoon for David Lerner Pitch

Elderly investors are looking for yield. And elderly investors are suckers for a free meal. Put the two together and you’ve got a recipe for packing the grand ballroom of a Marriott hotel with 300 sixty- and seventy-somethings who are prime targets for a brokerage firm looking to peddle illiquid investments.

David Lerner Associates, a Syosset, N.Y.-based brokerage firm whose founder was barred from the securities business for a year in 2012, is still out there wooing seniors to break bread at a local hotel and hear the pitch for its investments.

I went to one of those dinners at a Marriott hotel in Trumbull, Conn. in June, and wrote about it in my column tonight for TheStreet Foundation. Prominent in the pitch that night was the firm’s non-traded real-estate investment trust, a highly illiquid investment that I sure wouldn’t want my elderly mom to buy.

What’s stunning is that investors trip over themselves to attend Lerner events despite the firm’s history. From my story:

Finra said in a complaint on May 27, 2011 that Lerner and his firm targeted many “unsophisticated and elderly” clients to sell illiquid non-traded real-estate investment trusts that were concentrated in the hotel industry. The firm used misleading marketing techniques to sell the REITs, Finra said. In the months after the complaint, Finra said Lerner sent letters to 50,000 customers in an attempt to “counter negative press.” And even those letters had “exaggerated, false or misleading statements,” according to an amended Finra complaint on Dec. 13, 2011. The $14 million in fines and restitution against the firm was Finra’s largest monetary sanction of 2012, said Michelle Ong, a Finra spokeswoman.

You can read the story here.

Can Goldman Sachs’ Women Make the Cut at ‘Extreme Jobs?’

Here’s the latest in the long-running battle between Goldman Sachs and the women who sued the firm in 2010 for gender discrimination:

Both sides in recent weeks have filed dozens of briefs and exhibits, mostly focused on the women’s request earlier this year that the court grant them class status so that they can represent 2,300 current and former associates and vice presidents who allegedly were discriminated against in pay and promotion policies. Among issues that have come up: Whether women at so-called “extreme jobs” like the ones at Goldman simply can’t cut it.

Goldman trotted out Michael A. Campion, a Purdue University management professor, to make the  case. While Campion testified that he did not have the data to draw a conclusion as to whether women make less because of the demands of an extreme job, he said it is “plausible” and that “it’s a consideration that’s not minor.” I talk about Campion’s theory in my column today for TheStreet Foundation.

Why Jordan Belfort’s ‘Sucker List’ Won’t Be Released to ‘Inside Edition’

The list of investors who got fleeced by convicted felon Jordan Belfort, aka “The Wolf of Wall Street,” would be gold in the hands of financial crooks, and that’s why a federal judge in Brooklyn told the producers of “Inside Edition” in June that he wouldn’t hand it over to them.

“It’s pretty well known in the fraud world that the best list to get is the list of people who have already been taken,” Doug Shadel, an expert on fraud schemes and the elderly at AARP, told me in an interview.

In my story for The New York Times DealBook last month, I looked at the ways that financial criminals find and fleece their victims. You can read the story here.

Goldman Sachs Doesn’t Want to Be Known as Misogynist ‘Vampire Squid’

On July 3, Goldman, Sachs & Co. submitted a 74-page memorandum of law and declarations of 27 Goldman Sachs witnesses to Judge James C. Francis of the U.S. District Court for the Southern District of New York and to three women who are suing the firm for gender discrimination.

So where are the documents?

The high-profile case of Cristina Chen-Oster et al. v. Goldman, Sachs & Co. et al. has been going on since Chen-Oster and two other former Goldman women sued in 2010. On July 1, the women’s lawyers filed a brief asking the court to certify them as a class. I wrote about the heavily redacted document in this story for TheStreet.

On July 3, Goldman filed its response. But 16 days later, it still is not on the court docket.

As it turns out, Goldman has been at work redacting that document over the past two weeks, and you can’t help but wonder what it is that the firm is so hellbent on keeping from the public. I raised that question in my latest column for TheStreet. You can read it here.

Goldman Sachs Women Say They Make Less Than Men Who Frequent Strip Clubs, Call Them ‘Bimbos’

Four years ago, a former Goldman Sachs & Co. executive and two of her former colleagues sued the firm, alleging sex discrimination and asking to be certified as a class.

Today, the women filed documents that added to an extensive dossier of allegations. Among the filings was a request that a judge in the Federal district court in Manhattan allow H. Christina Chen-Oster and her co-plaintiffs to proceed in their suit as a class representing a class of women who work — or worked — at the bank.

I wrote about the latest round of filings for TheStreet Foundation today. You can read my column here, but here are a few highlights:

There are the strip clubs. The guys who organize departmental golf games and don’t invite the women. The liberal use of the word “bimbo” to describe Goldman women, many of whom graduate from the same Ivy League schools the men do. And, of course, the very discouraging numbers about pay and promotion. But the biggest deal about Chen-Oster’s brief filed in U.S. District Court for the Southern District of New York court July 1 seeking class action status is the redactions. Because even when women and their lawyers fight bitter battles to get their hands on important documents that expose discrimination, companies always seem to find a way to keep the public from hearing about the worst stuff.

Brokerage firms put an immeasurable amount of energy into making sure the public never sees the real numbers on women, promotions, and compensation. And they get apoplectic  at the idea that the public might read allegations like that of former Goldman employee Shanna Orlich, who says she went to a holiday party in 2007 where a male managing director had hired women clad in “short black skirts, strapless tops, and Santa hats” to mingle with the Goldman men.

And yet, somehow, what started as a cluster of professional women at Goldman has mushroomed into a very important case.

Still, there’s much we don’t know.  Take a look at the latest filing and scroll through to see the thick black lines that keep you from hearing the whole story.

Finally, the Regulators Are Trying to Protect You. But It’s Nothing But Bad News for Investors

Finra, which is the outfit that Wall Street pays to regulate itself, is pushing hard on a proposal that it thinks will help nail bad guys on Wall Street.

It sounds great on the surface: Give arbitrators permission to refer a rogue to the director of enforcement even as an investor’s hearing is going on. You know, so we can catch people like Bernie Madoff, who was such a trusted name on Wall Street that he was chairman of the Nasdaq Stock Market.

As of now, arbitrators have to wait until a hearing is over before they can tell headquarters that a villain is on the loose. Finra wants to be able to get on the case ASAP.

Nice idea, if only it didn’t have the potential to wreak havoc on the arbitration hearing of the poor slob who’s in the middle of trying to get his or her case resolved. It’s yet another example of the nutty things that can happen when you bar investors from going to court, where you don’t have all the secrecy of arbitration and thus don’t have to jump through hoops to figure out ways to get the word out. Here’s my story published tonight on TheStreet.com.

Anworth Mortgage, Your Greed is Showing

“Do your homework” sounds like reasonable enough advice when you’re leafing through a personal finance magazine or listening to the babble of the talking heads on a financial show. But is it practical?

In my story today for TheStreet Foundation, I write about a publicly traded real-estate investment trust, Anworth Mortgage Asset Corp. Its shareholders will vote at the company’s annual meeting today to determine whether the current board will be ousted in favor of a group proposed by activist investor Arthur Lipson.

I’m not so interested in the pyrotechnics of the fight itself. I’m just wondering if there’s any way that a shareholder without a private investigator’s license could possibly understand the far-flung activities of Anworth management without quitting their day jobs. From my story:

A thorough vetting of the company’s officials would take an investor from Anworth’s standard filings with the Securities & Exchange Commission to a hodge-podge of regulatory documents that occasionally outline mishandling of investor money by stock brokers who worked for a brokerage firm controlled by the CEO.

We really ought to stop giving the public the impression that if they just took the time to read an annual report, or a prospectus, or whatever, that they can take control of their portfolio and stay on top of things.

It’s my first column as founding journalism fellow at TheStreet Foundation, and I’m looking forward to producing more. You can read the column here.

Antilla Gets Silurians Award for NY Times story on brokers

The Society of the Silurians said last week that my June 10, 2013 New York Times article “A Rise in Requests From Brokers to Wipe the Slate Clean” won first place in the Excellence in Journalism Awards competition in the Business/Financial journalism category.

From the press release:

“Her article highlighted the quiet attack by brokers on BrokerCheck, the Financial Industry Regulatory Authority database that theoretically is intended to protect investors from unscrupulous securities salesmen. Antilla discovered tremendous acceleration in efforts by brokers to have mentions of misconduct expunged from their records and an apparent willingness on the part of the regulators to go along. Her article prompted the regulatory group to review the proposed easing of expungements and to issue new guidelines to securities case arbitrators.”

You can read the article here.